THE Reserve Bank of Zimbabwe (RBZ) has said it is maintaining cash withdrawal limits at levels set in February as the banking sector has done well to promote digital banking in the wake of Covid-19 pandemic.
In February, RBZ Governor Dr John Mangudya, in his year-start monetary policy, capped cash withdrawal limits for individuals at $2 000 per week while mobile banking transactions were capped at $5 000 per transaction and an aggregate limit of $35 000 per week.
Dr Mangudya presented his 2021 mid-term monetary policy statement early this month where he remained silent on withdrawal limits.
Expectations were high that he would increase the cash withdrawal limits after the Central Bank released new $50 dollar notes in July.
At the time of releasing the new notes, the bank said it shall release $360 million through the normal banking channels and banks were expected to fund their respective accounts held at the Reserve Bank and collect the cash from 7 July 2021.
However, Dr Mangudya told Sunday Business that his mid-term monetary policy statement remained silent on reviewing cash withdrawal limits as he felt the current levels were enough to sustain the appetite for cash.
He said in addition, because of the Covid-19 pandemic, banks have primarily moved to digital transactions to avoid physical contact with their customers.
“We were silent because most banks seem to be coping well with the demand for cash for their customers. We were therefore, trying to ensure that we don’t upset what is working or to try to mend what is working,” he said.
“Also given the pandemic, most banks are assisting their customers through digital services.”
The appetite for cash over the years has been largely driven by travelling public.
The banking public has also generally preferred to withdraw their savings because of punitive bank charges for digital transactions.
Banks in Zimbabwe have also not been effecting interest rates on deposits, further dampening banking appetite.
However, in his monetary policy, Dr Mangudya said the Central Bank has engaged the Bankers Association of Zimbabwe on the need to comply with Statutory Instrument 65A of 2020 on the payment of interest on savings accounts.
He said banks with effect from 1 July agreed to scrap bank charges on savings accounts and fixed-term deposits and also agreed to offer minimum interest rates.
According to the RBZ, banks are now supposed to offer a minimum of five percent per annum interest for Zim dollar savings accounts and one percent per annum for savings accounts in foreign currency.
For Fixed Term Deposits accounts, banks are now mandated to offer a minimum of 10 percent interest per annum for Zim dollar accounts while for foreign currency accounts the rate has been pegged at a minimum of 2,5 percent per annum.
Dr Mangudya also warned against traders who are now rejecting coins and some notes. He said no coins and bond notes have expired and are still legal tender.
“That wayward behaviour (of rejecting money) is spurred by negative ulterior motives which are associated with arbitrage and the practice of not banking money. The Bank encourages the public not to be short-changed by such traders and to report such unbecoming behaviour to the Bank, the Financial Intelligence Unit (FIU) or the Zimbabwe Republic Police for corrective action to be taken against such malpractices.”